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Thursday, March 13, 2014

J Is For Job Losses In Phokeng

Central Phokeng, around 5kms from where I live

One of the reasons I'm such a strong advocate for running your own business is that no one can retrench you.

A client can fire you. A long term contract that provides the backbone of your business can expire.But hopefully, if such a thing happens, you made sure you have other clients who can take up the slack and you know where to go look for more work to replace the client you lost.

Another reason I like the online business in particular is that, you don't just depend on your local economy. It's good business to look for clients locally, but the Internet also allows you to look for clients elsewhere, so if there are problems with the local enonomy, you still have a good chance of riding through it.

I've recently started thinking about this because of the huge job losses that are happening in Phokeng/Rustenburg. This month alone, my older sister who is 50 years old, was retrenched from her job. The owner is shutting down the business. The employment contract for one of my nephews is not going to be renewed at the end of March. My older brother's employer is retrenching, though his job is safe. Talk to every family, and you'll hear the same/similar story: businesses failing or people losing jobs.

So what's going on in Phokeng?

A bit about Phokeng, mining and the economy of the area

Phokeng is a town in the North West province of South Africa (thought it was a village, but a lot of literature describes it as a town, so I'll go with the flow:-)

It is the capital of the Royal Bafokeng Nation and lies near Rustenburg, around 150 kilometres west of Johannesburg. The area is the major location of platinum mines in South Africa, and South Africa produces around 75% of the world's platinum. As you can imagine, the local economy is heavily reliant on the mining economy.

I'm not sure how long the miners have been on strike for this session? And there was another stretch last year and maybe early this year? Sorry, after a while they all blend over each other and this one is apparently indefinite, so there is no end in sight. The impact has been devastating.

I don't know how the mining strikes are affecting the mining industry directly (I read somewhere that they are costing South Africa R400 million per day), but the impact has gone beyond those involved in the industry to affect local businesses (secondary impact).

The mines were shut down to ensure we don't have the same violence as happened in Marikana last year(Marikana is also nearby).

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Many mining employees and their families have gone back to their towns of residence to minimise cost of living, spend time with family while the negotiations drag on. Their numbers far exceed the number of locals (maybe twice, triple the number?).

The result is that Rustenburg, the nearby city where we do most of our shopping, is practically empty. I drove through downtown going to the mall the day before yesterday, and it was scary to look down one end of the street to another and see only two people, when i used to avoid the place altogether even though it's the shorter route to the big mall, because the same street used to be crowded with hundreds of people at any given time.

That means that there are fewer people to buy whatever local stores are selling, and many privately owned businesses have no hope of making their daily/weekly quotas to cover their expenses. So they are retrenching, at least until the madness ends.

Then there are those business owners who are fed up with the unending strikes and will not reopen. My sister's employer is one of them. And there are those business owners who have depleted their funds and could not reopen their businesses, even if they wanted to.

South Africa already has high unemployment rates, and Phokeng was no different, with many people running small and micro businesses to make a living. The locals are collateral damage at this stage: not necessarily involved in the dispute, but affected by it nonetheless.

This is one of those times where we all lose, and I'm grateful that my income does not depend on the local enocomy and I have food security through my gardens.

Anyhoo, it got me thinking that we, the people of Phokeng, need to start thinking very seriously about developing other business areas and not be so heavily reliant on mining. We do talk quite a bit about what will happen when the platinum is depleted. It will happen.. mines eventually do run out, no matter how abundant the supply seems. But so far, I don't see or hear of the aggressive development of manufacturing and other types of industries.

The Royal Bafokeng Holdings does invest to diversify the assets from mining royalties, but we can't just depend on them either, and we need the kind of investment that creates thousands of local jobs.

20 comments:

That was a great summary of what is going on with the strikes - you hear about them all the time but we never hear about the actual impact that they have, this is probably the first time I have heard about this. Which is crazy, because these disputes seem to happen for most of the year and must have a bad impact. I am glad your business does not rely on the mines but it is scary that this is happening, I feel like it will lead to further migration into places like Johannesburg and Cape Town which are already struggling to provide jobs and housing for everyone. Eish!

I feel what they feel and understand your empathy, Damaria. I used to be one of those employees that gets laid off and have nowhere to go. But people can think of ways and means to survive so I hope that they will do the same. It also feels bad that as an individual, you can only do so much for them. That's why my advocacy now is to promote the VA industry and online entrepreneurship in my country to improve the lives of my countrymen and change their way of thinking from an employee to entrepreneur mindset. I may be alone right now, but I know that in due time, I can gain followers and believers in my campaign. You writing their story is your way of waking up the hearts of those in position to do something. Let's just hope and pray that they would do their part, too. :)

@po - That is my worry too; that they'll go where opportunities are. My people have worked very hard to encourage us to live here. We are encouraged to find jobs and opportunities where we can when we are young and to see the world; something like a gap year, but much longer. Even in the age of my grandfather (born 1890) and his father before him, young men went away to work at the diamond mines in Kimberly and brought their money to invest here. That is how we ended up owning the land where the mines were, back before Black people thought to take on Western notions of land ownership. But we're always encouraged to come back home after the travelling/learning phase to settle here, start a business or something, raise a family here and share what we learnt through our travels.

My concern is, if there are no economic opportunities here, the youth who are travelling won't come back and the ones who are here will move away forever. That would be a huge loss of our human resources and reduces our chances of attracting economically active young people to settle down here.

@Pam - Thanks.

@Roche - Thanks Roche. I wish you good luck with your advocacy. Hopefully you will eventually reach critical mass of voices working towards the same goal, and you'll start to see change.

Many people here do have an enterpreneurial bend. The biggest challenge, I think (no hard evidence) is that there aren't that many of us locals as compared to work immigrants. So Rustenburg (the city nearby) grew on the basis of their numbersd needs, and without them, we don't have as solid a customers to sell our wares. So to a large extent, Phokeng needs to create huge job opportunities, so people from the rest of South Africa, Mozambique, Malawi, Lesotho etc continue to see the area as a land of opportunity. It will provide local employment, but we also need the excess jobs to create a solid client base for whatever we sell. I think we also need to start looking at creating businesses that go beyond an obvious local client base.. become a bit global, so when the mines are depleted, our grandchildren can have the world as their customer base. Which is kind of odd for me to say that, now that I think about it, because I also tend to be a strong advocate of buying local. Hehe:-)

Goodness, I know what that's like. We moved to the Orlando area shortly after the recession in the US, and driving down the main drag of the most touristy areas, you'd pass at least one to three closed businesses for every open one. Thankfully that's changing. Things have begun to recover here, but it is a scary prospect.

I suppose tone of the only good things to come out of the recent global recession is the number of people who were more or less forced to "get off the fence" and strike out on their own in business. i think that our local economy is actually all the better for it - a number of niche businesses have sprung up and they offer better quality goods and services than the "big" players.

Hi Li. You are right. The struggle does force people to be more creative and that is very good for society. But ouch! The growing pains bite:-)

@Sherry - It's been weeks and it's still ongoing. Interestingly, some people I know are starting to look for alternative ways to make money; some find mostly low-paying part-time jobs. They haven't exactly resigned from their old jobs or anything, and they'd probably go back when issues are resolved. But meanwhile, they are finding ways to earn some money.

Hey, looks like you're doing the A-Z on your own schedule, cool. Yeah, having your own customer base can be less precarious than being dependent on one employer, but I guess it means you gotta wear a lot of hats, huh?

Hi Damaria, I've come to this blog from your gardening blog - you are a very busy lady! It is 11.30 pam and I have a sink of dishes waiting in the kitchen, but I've been glued to your blog for at least 20 minutes. It is very interesting and informative; I love to read about how people live in other countries. Job losses are endemic the world over at the moment it seems. In Australia our two main car manufacturers are closing in the next couple of years, and thousands of people will be out of work, not to mention all the small independent manufacting companies who supply the small bits...

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The strike has really been bad... Over the past months, I've noticed lots of small businesses closing their doors... and it will get worse before it gets better...As it is, we have the third highest unemployment rate in the world for people between the ages of 15 to 24.More than 50% of young South Africans between 15 and 24 are unemployed. That is really scary!Writer In Transit

While I know we've been here before, we're definitely in season where we are being given an opportunity to be more self sufficient. I'm thankful that you have already committed to providing both your food and income, you're the example they need to see. And, the person to help lead the discussion.

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